LGS 200- Abigail Hammond- Exam 2
When is a release binding? - ✔️✔️1. The agreement is made in good faith (honestly).
2. The release contract is in a signed writing (required in many states).
3. The contract is accompanied by consideration.
Covenant not to sue - ✔️✔️An agreement to substitute a contractual obligation for
some other type of legal action based on a valid claim. EX. slide 28
Promissory estoppel - ✔️✔️A doctrine that applies when a promisor makes a clear and
definite promise on which the promisee justifiably relies.
Promissory Estoppel Elements - ✔️✔️1. There must be a clear and definite promise.
2. The promisor should have expected that the promisee would rely on the promise.
3. The promisee reasonably relied on the promise by acting or refraining from some act.
4. The promisee's reliance was definite and resulted in substantial detriment.
5. Enforcement of the promise is necessary to avoid injustice.
Estopped - ✔️✔️Barred, impeded, or precluded. (prevented)
Contractual capacity - ✔️✔️The legal ability to enter into contracts; the threshold
mental capacity required by law for a party who enters into a contract to be bound by
that contract. (as when a person is young or mentally incompetent, capacity may be
lacking or questionable)
Disaffirmance - ✔️✔️The legal avoidance, or setting aside, of a contractual obligation
What are the four requirements that must be met before a valid contract exists? -
✔️✔️1. Agreement • an offer by one party to enter into the agreement and an
acceptance of the terms of the offer by another party. 2. Consideration • Any promises
made by the parties to the contract must be supported by legally sufficient and
bargained-for consideration (something of value received or promised, such as money,
to convince a person to make a deal). 3. Contractual capacity • Both parties entering
into the contract must have the contractual capacity. That is, the law must recognize
them as possessing characteristics that qualify them as competent parties. 4. Legality •
The contract's purpose must be to accomplish some goal that is legal and not against
public policy.
What are the requirements typically raised as defenses to the enforceability of an
otherwise valid contract? - ✔️✔️1. Voluntary consent • The consent of both parties
must be voluntary
2. Form • The contract must be in whatever form the law requires.
,(Slide 5 for examples)
Types of contracts: Formation - ✔️✔️1. Bilateral—A promise for a promise.
2. Unilateral—A promise for an act—that is, acceptance is the completed performance
of the act.
3. Formal—Requires a special form for creation.
4. Informal—Requires no special form for creation.
5. Express—Formed by words, such as oral, written, or a combination.
6. Implied—Formed by the conduct of the parties.
Types of contracts: Performance - ✔️✔️1. Executed—A fully performed contract.
2. Executory—A contract not fully performed.
Types of contracts: enforceability - ✔️✔️1. Valid—The contract has the necessary
contractual elements: agreement (offer and acceptance), consideration, legal capacity
of the parties, and legal purpose.
2. Unenforceable—A contract exists, but it cannot be enforced because of a legal
defense.
3. Voidable—One party has the option of avoiding or enforcing the contractual
obligation.
4. Void—No contract exists, or there is a contract without legal obligations.
Agreement Definition - ✔️✔️A meeting of two or more minds in regard to the terms of a
contract.
Agreement events - ✔️✔️1. An offer by one party to form a contract (offeror)
2. An acceptance of the offer by the person to whom the offer is made (offeree)
Agreement decisions - ✔️✔️1. Both parties must manifest to each other their mutual
agreement to the same bargain.
2. Once an agreement is reached, if the other elements of a contract (consideration,
capacity, and legality) are present, a valid contract is formed.
Offer - ✔️✔️A promise or commitment to perform or refrain from performing some
specified act in the future.
Contract - ✔️✔️An agreement that can be enforced in court; formed by two parties,
each of whom agrees to perform or to refrain from performing some act now or in the
future.
What are the two parties involved in every contract? - ✔️✔️1. Offeror - A person who
makes an offer.
2. Offeree - A person to whom an offer is made.
, When is intent important? - ✔️✔️In determining whether a contract has been formed.
The intent is determined by the objective theory of contracts.
Objective theory of contracts - ✔️✔️A theory under which the intent to form a contract
will be judged by outward, objective facts (what the party said when entering into the
contract, how the party acted or appeared, and the circumstances surrounding the
transaction) as interpreted by a reasonable person, rather than by the party's own
secret, subjective intentions.
Objective facts might include: 1. What a party said when entering into the contract 2.
How a party acted or appeared 3. The circumstances surrounding the transaction
What are the three elements that are necessary for an offer to be effective? - ✔️✔️1.
The offeror must have a serious intention to become bound by the offer.
2. The terms of the offer must be reasonably certain, or definite, so that the parties and
the court can make sure the terms of the contract.
3. The offer must be communicated to the offeree.
What are the ways an offer can be terminated? - ✔️✔️• Termination by Action of the
Offeror
• Termination by Action of the Offeree
• Termination by Operation of Law
Termination by Action of the Offeror - ✔️✔️Some offers can be made irreversible, such
as option contracts
Option contract - ✔️✔️A contract under which the offeror cannot revoke his or her offer
for a stipulated time period and the offeree can accept or reject the offer at any time
during this period.
Termination by Action of the Offeree - ✔️✔️•Revocation (offeror)
•Rejection (offeree)
•Counteroffer (offeree)
Termination by Operation of Law - ✔️✔️1. Lapse of time
2. Destruction of the subject matter
3. Death or incompetence of the offeror or offeree
4. Supervening illegality (the offer becomes illegal)
Acceptance - ✔️✔️The offeree's notification to the offeror that the offeree agrees to be
bound by the terms of the offeror's proposal
Unequivocal Acceptance - ✔️✔️To exercise the power of acceptance effectively, the
offeree must accept unequivocally (no doubt)
When is a release binding? - ✔️✔️1. The agreement is made in good faith (honestly).
2. The release contract is in a signed writing (required in many states).
3. The contract is accompanied by consideration.
Covenant not to sue - ✔️✔️An agreement to substitute a contractual obligation for
some other type of legal action based on a valid claim. EX. slide 28
Promissory estoppel - ✔️✔️A doctrine that applies when a promisor makes a clear and
definite promise on which the promisee justifiably relies.
Promissory Estoppel Elements - ✔️✔️1. There must be a clear and definite promise.
2. The promisor should have expected that the promisee would rely on the promise.
3. The promisee reasonably relied on the promise by acting or refraining from some act.
4. The promisee's reliance was definite and resulted in substantial detriment.
5. Enforcement of the promise is necessary to avoid injustice.
Estopped - ✔️✔️Barred, impeded, or precluded. (prevented)
Contractual capacity - ✔️✔️The legal ability to enter into contracts; the threshold
mental capacity required by law for a party who enters into a contract to be bound by
that contract. (as when a person is young or mentally incompetent, capacity may be
lacking or questionable)
Disaffirmance - ✔️✔️The legal avoidance, or setting aside, of a contractual obligation
What are the four requirements that must be met before a valid contract exists? -
✔️✔️1. Agreement • an offer by one party to enter into the agreement and an
acceptance of the terms of the offer by another party. 2. Consideration • Any promises
made by the parties to the contract must be supported by legally sufficient and
bargained-for consideration (something of value received or promised, such as money,
to convince a person to make a deal). 3. Contractual capacity • Both parties entering
into the contract must have the contractual capacity. That is, the law must recognize
them as possessing characteristics that qualify them as competent parties. 4. Legality •
The contract's purpose must be to accomplish some goal that is legal and not against
public policy.
What are the requirements typically raised as defenses to the enforceability of an
otherwise valid contract? - ✔️✔️1. Voluntary consent • The consent of both parties
must be voluntary
2. Form • The contract must be in whatever form the law requires.
,(Slide 5 for examples)
Types of contracts: Formation - ✔️✔️1. Bilateral—A promise for a promise.
2. Unilateral—A promise for an act—that is, acceptance is the completed performance
of the act.
3. Formal—Requires a special form for creation.
4. Informal—Requires no special form for creation.
5. Express—Formed by words, such as oral, written, or a combination.
6. Implied—Formed by the conduct of the parties.
Types of contracts: Performance - ✔️✔️1. Executed—A fully performed contract.
2. Executory—A contract not fully performed.
Types of contracts: enforceability - ✔️✔️1. Valid—The contract has the necessary
contractual elements: agreement (offer and acceptance), consideration, legal capacity
of the parties, and legal purpose.
2. Unenforceable—A contract exists, but it cannot be enforced because of a legal
defense.
3. Voidable—One party has the option of avoiding or enforcing the contractual
obligation.
4. Void—No contract exists, or there is a contract without legal obligations.
Agreement Definition - ✔️✔️A meeting of two or more minds in regard to the terms of a
contract.
Agreement events - ✔️✔️1. An offer by one party to form a contract (offeror)
2. An acceptance of the offer by the person to whom the offer is made (offeree)
Agreement decisions - ✔️✔️1. Both parties must manifest to each other their mutual
agreement to the same bargain.
2. Once an agreement is reached, if the other elements of a contract (consideration,
capacity, and legality) are present, a valid contract is formed.
Offer - ✔️✔️A promise or commitment to perform or refrain from performing some
specified act in the future.
Contract - ✔️✔️An agreement that can be enforced in court; formed by two parties,
each of whom agrees to perform or to refrain from performing some act now or in the
future.
What are the two parties involved in every contract? - ✔️✔️1. Offeror - A person who
makes an offer.
2. Offeree - A person to whom an offer is made.
, When is intent important? - ✔️✔️In determining whether a contract has been formed.
The intent is determined by the objective theory of contracts.
Objective theory of contracts - ✔️✔️A theory under which the intent to form a contract
will be judged by outward, objective facts (what the party said when entering into the
contract, how the party acted or appeared, and the circumstances surrounding the
transaction) as interpreted by a reasonable person, rather than by the party's own
secret, subjective intentions.
Objective facts might include: 1. What a party said when entering into the contract 2.
How a party acted or appeared 3. The circumstances surrounding the transaction
What are the three elements that are necessary for an offer to be effective? - ✔️✔️1.
The offeror must have a serious intention to become bound by the offer.
2. The terms of the offer must be reasonably certain, or definite, so that the parties and
the court can make sure the terms of the contract.
3. The offer must be communicated to the offeree.
What are the ways an offer can be terminated? - ✔️✔️• Termination by Action of the
Offeror
• Termination by Action of the Offeree
• Termination by Operation of Law
Termination by Action of the Offeror - ✔️✔️Some offers can be made irreversible, such
as option contracts
Option contract - ✔️✔️A contract under which the offeror cannot revoke his or her offer
for a stipulated time period and the offeree can accept or reject the offer at any time
during this period.
Termination by Action of the Offeree - ✔️✔️•Revocation (offeror)
•Rejection (offeree)
•Counteroffer (offeree)
Termination by Operation of Law - ✔️✔️1. Lapse of time
2. Destruction of the subject matter
3. Death or incompetence of the offeror or offeree
4. Supervening illegality (the offer becomes illegal)
Acceptance - ✔️✔️The offeree's notification to the offeror that the offeree agrees to be
bound by the terms of the offeror's proposal
Unequivocal Acceptance - ✔️✔️To exercise the power of acceptance effectively, the
offeree must accept unequivocally (no doubt)
